NETHERLANDS Law and Practice Contributed by: Willemijn van Duren and Rowena Zee, Arcagna
9.2 Recent Developments Affecting Planning Vehicles In the Netherlands, the main opportunities and obsta- cles around foundations (including STAKs) and foreign trusts tend to arise in cross-border situations, driven by differences in legal and tax classification between jurisdictions. A structure that is treated as “transpar- ent” from a Dutch perspective may be viewed as a separate taxable entity elsewhere (or vice versa), creating mismatches in timing and/or character of income and distributions. A common example is the use of a STAK to certify shares in a Dutch limited liability company (BV) for family business succession planning, allowing the next generation to hold depositary receipts while con- trol is exercised by the foundation board. In Dutch tax practice, economic entitlements (including divi- dend income) are often attributed at the level of the depositary receipts holders rather than the STAK itself, especially where the administration terms effectively require onward distribution. In other jurisdictions, however, a STAK may be classified as a separate enti- ty (eg, a business entity), potentially resulting in divi- dend/income mismatches; this should be assessed case by case and may require tailoring the STAK’s articles and/or administration terms. Conversely, where wealth is settled into a discretion- ary trust, Dutch income tax and gift/inheritance tax analysis often applies a “look-through” approach (eg, under the Dutch APV concept), generally attributing the assets to the settlor (and, on the settlor’s death, shifting attribution to heirs/beneficiaries depending on the facts). In jurisdictions that treat the trust as the primary taxpayer, this can produce double taxation or gaps. If a (future) beneficiary of a trust moves to the Netherlands, obtaining advice on the Dutch tax treat- ment of the trust is highly recommended. 10. Fiduciary Regulation, Standards and Taxation 10.1 Corporate and Professional Fiduciaries The Netherlands is a civil law jurisdiction and does not recognise a domestic Dutch law trust concept. As a result, “trustee” services are mainly encountered
in a cross-border setting (eg, acting for or alongside trustees of non-Dutch law trusts) and are typically pro- vided through regulated trust/corporate service and wealth management offerings. Whether a corporate or professional fiduciary requires a licence depends on the nature and scope of the activities. Where a firm provides trust and corporate services on a commercial basis to multiple, unrelated clients (eg, acting as director/administrator of enti- ties, providing registered office services or similar fiduciary services), Dutch regulatory and AML/com- pliance frameworks may require licensing/registration and ongoing supervision. Where the services instead resemble investment/asset management (eg, dis- cretionary portfolio management), separate financial regulatory permissions may be required. By contrast, a director or administrator acting within a single-family structure (with no wider service offering) may in certain cases fall outside licensing requirements, but this is highly dependent on the specific facts and circum- stances of the case. Dutch law does not have a separate “trustee liability” regime. In practice, however, professional fiduciaries are generally held to a higher standard of care than private individuals, based on their expertise, role and regulatory/compliance context. The Netherlands does not have a specific private trust company (PTC) concept. A private company or foun- dation can be used to perform trustee-like functions, but if it provides regulated fiduciary services, it may be treated as a regulated provider, so structuring and scope should be assessed upfront. 10.2 Taxation of Trusts In the Netherlands, the residence of the trustee (or the place where a trust is administered) is generally not the decisive factor for Dutch taxation. The Dutch tax analysis is highly fact-specific and typically turns on (i) the type of trust (eg, discretionary versus fixed), (ii) whether the settlor retains (directly or indirectly) con- trol or powers, and (iii) whether the trust holds Dutch- situs assets (eg, shares in a Dutch BV or Dutch real estate).
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